In business and politics, there is a particular kind of moment when someone finally says aloud what everyone in the room already knows. Standing in front of reporters at Computex in Taipei, Jensen Huang had the quiet authority of someone who had been waiting a long time to say precisely this. He stated unequivocally that the rules were a failure. Not a partial failure. It is not a policy that requires improvement. A basic structural failure, based on presumptions that had already been refuted by reality.
In some way, the scene seemed fitting. The distance between Washington’s aspirations and Asia’s manufacturing reality is always greatest in Taipei, the symbolic center of the global semiconductor industry. Huang, the CEO and founder of Nvidia, didn’t take offense. He arrived with figures.
Nvidia’s market share in China decreased from 95% to 50% during the Biden administration. It’s not a rounding error. That is a business that is quietly losing half of its market share in the second-largest economy in the world. Furthermore, the export restrictions’ underlying premise—that cutting off cutting-edge chips would slow China’s AI development—turned out to be an accelerator in the opposite direction. Chinese companies made greater and quicker investments in developing their own technology after being prohibited from purchasing American technology. The threat was not contained by the restrictions. It was financed by them.
It’s important to consider that irony because it’s the kind of thing that seems clear in retrospect but apparently wasn’t clear to enough people in Washington when it mattered. Huang maintained that no Chinese government subsidy program could have stimulated China’s domestic chip industry as much as the Biden administration’s AI diffusion regulations, which were tightened over a four-year period.
Industry insiders believe Huang was publicly stating what many Silicon Valley residents had been saying in private for years: that economic containment, at least in semiconductors, doesn’t function as Cold War theory suggests. Technology is constantly evolving. It locates routes. Alternatives are inspired by it.
The Trump administration, which has never shied away from amending the regulations of its predecessors, declared that it would completely remove the most extensive export restrictions from the Biden administration. The timing was precise. Significant AI agreements, such as those with Saudi Arabia announced during Trump’s Middle East tour, were made possible by the rollback, which occurred just days before Huang’s Computex press conference. For a government that continues to take strong stances against Huawei and add Chinese businesses to restricted lists, that is a big change.
There isn’t a clear winner in the final image. In order to prevent American companies from selling cutting-edge technology to dozens of recently flagged companies, the White House relaxed some regulations while tightening others. Almost simultaneously, the Commerce Department announced new licensing requirements for specific Nvidia chips. Meanwhile, Washington was accused by Beijing of undermining recent trade agreements made in Switzerland. Everyone continues to play offense.
As this develops, it’s difficult to ignore how much real technology policy is shaped by press conferences, shareholder calls, and the tenacious, fact-based arguments of executives with vested interests rather than by congressional hearings or think-tank reports. Huang did not engage in conventional lobbying. He waited for the data to catch up and presented a case based on market reality.
It’s unclear if Washington has actually changed direction or has just rearranged the same conflicts into a different arrangement. The US and China are still engaged in a chip war. A more complex chapter has just begun, one in which it is more difficult than ever to distinguish between safeguarding national security and harming domestic industry.
